Healthcare Startup Fruit Street Health Uses Kabbage Instead of Traditional Bank Loans
Laurence Girard, CEO & Founder of Fruit Street, was originally planning to go to medical school before he started his company. He was volunteering in an emergency room while taking a nutrition epidemiology course when he realized that healthcare needed to focus more on preventing conditions like diabetes.
In 2014, he founded Fruit Street, a HealthTech company that delivers the Center for Disease Control & Prevention’s diabetes prevention program. Participants sign up for the program with the goal of losing 5-7% of their weight to reduce their risk for Type 2 diabetes. Each week, customers video conference with a registered dietitian, take pictures of their food in the Fruit Street mobile application, use a Fitbit to track physical activity as well as a wireless scale to track weight loss progress.
Fruit Street markets its diabetes prevention program to large self-insured employers, health plans, consumers, and physicians who want to refer their patients. The company has raised $10 million in funding from 250 physicians and converted to a public benefit corporation (a business whose mission is to have a social impact) to highlight its commitment to improve healthcare. “We are a for-profit company, but we also write our social mission into our bylaws and always focus on putting patients first,” Laurence says.
Kabbage Easier to Access than a Traditional Bank Loan for Fruit Street
While Fruit Street has raised significant funding, nearly all early-stage startups require some form of additional funding to help accelerate the growth of its business and acquire more customers. Girard said, “Through social media advertising, we can sign up more consumers who need access to our diabetes prevention program. The $50K Kabbage provided us with allowed us to advertise to millions of consumers and physicians on social media who could benefit from our product.”
Despite Fruit Street’s healthy funding from physicians, that money doesn’t come all at once. “People often have the misconception you automatically have millions of dollars at your disposal when startups acquire a round of funding. That’s often incorrect. Funding is distributed in bursts over a period of time,” Laurence explains. He still requires funds to manage everyday operational costs, and traditional banks do not extend credit to a relatively young business with only a few years of operating history.
On a weekend morning while researching alternative funding options, Laurence filled out an online application for a Kabbage line of credit. “Five minutes later, Fruit Street was approved for $50K,” he says. “It was so much more convenient than going through a long application process with a traditional bank.”
Girard said, “Every startup with a good product that for which customers are willing to pay can always use another $50K to advertise its service and acquire more customers given the powerful reach and cost-effectiveness of social media.”